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HomeMy WebLinkAbout01/24/2012 Study Session Minutes MA /I\ STUDY SESSION MINUTES 11555 W. Civic Center Drive, Marana, Arizona 85653 Council Chambers, January 24, 2012, at or after 6:00 PM Ed Honea, Mayor Patti Comerford, Vice Mayor David Bowen, Council Member Herb Kai, Council Member Carol McGorray, Council Member Jon Post, Council Member Roxanne Ziegler, Council Member STUDY SESSION CALL TO ORDER AND ROLL CALL. Mayor Honea called the meeting to order at 5:58 p.m. Town Clerk Bronson called roll. All Council Members were present; there was a quorum of the Council. PLEDGE OF ALLEGIANCE /INVOCATION /MOMENT OF SILENCE. Led by Mayor Honea. APPROVAL OF AGENDA. Motion to approve the agenda by Council Member McGorray, second by Council Member Post. Passed unanimously. DISCUSSION /DIRECTION /POSSIBLE ACTION 1: Resolution No. 2012 -005: Relating to Development; approving and authorizing a final plat for Tangerine Business Park, Blocks 1 -10, Parcel "A ", Common Areas "A ", "B ", and "C" . Presented by Kevin Kish, who noted that this is a formality item which normally would be on the Consent Agenda at the regular meeting. Motion to approve by Council Member Bowen, second by Council Member Ziegler. Motion passed 6 -0; Council Member Kai having declared a conflict and left the dais during the discussion and vote. 2: Resolution No. 2012-006: to Personnel; approving and adopting amendments to the Town's Personnel Policies and Procedures, revising Chapter 5 - Work Rules, Policy 5 -5 "Discipline System ". Presented by Suzanne Machain as a formality, as this is a final reading and would normally have been on the Consent agenda at a regular meeting. Motion to approve by Council Member Ziegler, second by Council Member McGorray. Passed unanimously. January 24, 2012 Council Meeting Minutes 1 3: Relating to Public Relations; authorizing the expenditure of $1,000 to support the state -wide effort to host the International City /County Management Association (ICMA) international conference in Phoenix, Arizona in August 2012. Presented by Gilbert Davidson, who noted that the City of Phoenix was awarded the opportunity to host this international conference. Several entities have been trying to raise money and support for this conference for over 5,000 professionals from around the country as well as for internal visitors. Motion to approve by Council Member McGorray, second by Council Member Post. Passed unanimously. 4: Resolution No. 2012 -007: Relating to Utilities; adopting a notice of intention to increase wastewater rates and rate components, and setting a February 28, 2012 public hearing on the proposed increase. Presented by Frank Cassidy who noted that this is a required public hearing to set rates. Barbara Johnson and Frank Cassidy responded to questions and comments from Council. Motion to approve by Council Member Ziegler, second by Council Member Bowen. Passed unanimously. 5: Presentation: Relating to Administration; presentation and discussion of the framework for the development of the fiscal year 2012 -2013 budget. Introduced by Gilbert Davidson and presented by Erik Montague. Mr. Davidson noted that this evening was the kick -off for the annual budgeting process. He noted that Marana's budget has been an award - winning budget for the past several years for which he thanked Council for their support. This is a collaborative effort of all the departments, using the Strategic Plan as a guide, as well as individual input from the Council on critical issues facing the community. Tonight's presentation will cover budget management through the multi -.year recession, review of the general fund major revenues and reserves, the recovery planning which was introduced last year and how all those factor into the work done through strategic planning and the money that will be spent this year and how that ties into future projects. Erik Montague gave an update for FY 2012, where we are to date and a preliminary look at the next fiscal year beginning with the revenue structure starting with the "big three" sales tax, other agency /shared revenues, and licenses, permits and fees. These funds provide the majority of funding for the town's services. The high water mark was 2006 -07. The funds didn't stabilize until 2009 -2010. He emphasized "slow recovery" from 2010 -2011 with only a modest change from 2011 -2012, which puts the town back to about 2005 -2006 numbers. He further emphasizing that the town is a fundamentally different organization now than it was then focusing on core services and investing in resources when they become available. The town has moved from having multi -year surpluses to having multi -year deficits, which has required multi -year strategies to ensure having replacement funds and funding to provide the necessary service delivery. He anticipates another two to three years of recovery. Next, he illustrated sales tax revenues from July 2006 to November 2011, showing activity during that period for construction, retail, fire, transportation, restaurants and hotels. Most of the current growth is attributable to the wastewater treatment project (contracting sales tax) in the southern region. He concluded with the management of the general fund revenues, showing a comparison graph between fund balance and reserves. January 24, 2012 Council Meeting Minutes 2 Staff will adopt and maintain a minimum reserve target. In 2009 -2010, about $600,000 was added back to the reserves based on savings and efficiencies; in 2010 -2011, about $1.2. Currently, the numbers are trending about even for the current fiscal year. Gilbert Davidson then talked about recovery planning. The goal is to reinvest into the organization what will bring a stable work environment which will give the most benefit to the three components brought forward last year — current staff, resources and tools and strategic positions. He noted that over the past several years there has been a major reduction in staffing, and that when any staff left for any reason, that position was heavily scrutinized as to whether it needed to be replaced or whether existing staff could manage the workload. So the town went from a high of about 370 employees to about 300 this past year. A few positions were able to be added in this past year which was authorized by Council. But strategic positions are key positions that need to be added back into the budget to help position Marana for future sustainability, and staff will look at those for the coming fiscal year. As Council sets the initial formation for the future of the community, much of that is driven by the Strategic Plan document. Budget development is the first step in planning for the future. Once the budget's adopted, implementation is where staff carries out and monitors the policies for providing key services. The last part is reviewing updates on fiscal performance and measuring how we did. Managing a performance system is not just how employees are evaluated; it is also how individual departments perform as they relate to identified strategies. This will be continually enhanced and improved, and feedback will be given to Council to enable better communication with constituents on the fiscal and physical health of the community. Erik Montague then gave a report on the FY 2012 general fund update and prospects for the future, noting that the town is roughly where staff expected it to be at this point. This is primarily driven by the "big three" revenues. Most of those revenues are trending as expected. This is the third year of year- over -year revenue reduction in the category of court activities. Staff will continue to work closely with the court and other departments to manage trends. On the expenditure side, the employees are the most valuable asset to the organization which is demonstrated by the amount of resources allocated. There is a little savings left from the vacation buy -back program and a one -time pay -out program around the holidays, but there is some vacancy savings there. Overall, the town is at about 44% o. About $13M was taken for reserves over the year; about $1 M of that was for contingency. The rest had to do with the use of one -time capital outlays and other one- time programs and projects. Although for the current month, revenues were short of expenditures by about $900,000, in the months prior, adequate resources were acquired. Through the first six months, revenues exceeded expenditures by about $1 M. Even with the slow recovery, the expectation is that revenues will continue to trend as they have. On the expenditure side, there will be a little catch -up necessary. Some of the contracted repairs will be underway shortly. Staff continues to be diligent in managing their budgets, and some of the one -time projects are being monitored to get done by the end of the year. The preliminary outlook for 2013 is a slight or modest increase in the "big three" revenues. Currently, the increase is in the 3% to 4% percent range. There are some January 24, 2012 Council Meeting Minutes 3 things that will mitigate that such as allocating contracting sales tax out of the general fund back to the transportation fund. Again, he emphasized a very slow recovery. There are several points of pressure on the budget amounting to about $3M, including a potential increase in retirement costs (as a result of HB 2264), core insurance benefit cost increases of about 10 %, the State Land preserve lease obligation, currently being defrayed in part by the developer until a threshold revenue of $1 M is achieved, discriminatory bed tax (as a result of SB 1460 from 2011 relating to small communities of about $820K), increased debt obligations to ensure a structurally balanced budget, replacement funding — the largest being for vehicle and technology replacement which was started last year, contracting sales tax reallocation (these are one -time revenues) and any new legislation that will bring expenditure increases. Mr. Montague concluded with a budget timeline beginning with tonight's presentation. On the department side, the kick -off will begin this week and they will have about a month to complete their budget requests. By the middle of April, staff will bring back a Manager's Recommended Budget to Council as well as a Comprehensive Fee Schedule update. The tentative budget is scheduled for mid -May and the final budget adoption will be scheduled for mid -June. Mr. Montague and Mr. Davidson responded to questions from Council regarding the discriminatory bed tax to be used for tourism and the State Land lease of the Preserve, contracting sales tax and road repair within neighborhoods. Mr. Davidson gave some background on the acquisition of the State Land lease. Mr. Montague noted that as several bills move through the legislature, they could have a significant impact on the revenues and expenditures which could affect the budget numbers. Mr. Davidson followed up stating that the more staff can do to make Marana an attractive place to invest for businesses and residents, the more it will add to the bottom line. He agreed with Mr. Montague that the view for the next few years is going to be slow, but the more that can be done now to create the right environment will affect the long -term efforts. It will most likely be a lot of little things that add up over time rather than one large project that will improve the revenue outlook. Mayor Honea alluded to a direct nexus between the State Land preserve lease and the discriminatory bed tax as it relates to mitigation at the Ritz Carlton resort, and Mr. Davidson concurred that that may be a very positive option to solve the coming year's issue. Mr. Montague noted that staff is planning to move forward in the next budget cycle to take more of a maintenance approach to the roads. Council Member Ziegler also raised the issue of deterioration and maintenance of streets. She wants to be sure that the money set aside for this project is not moved to another fund. She expressed her desire for money to be put back into the budget for tuition reimbursement and the Silverbell median. Mr. Davidson expressed to Council that now is a good time for Council to bring their requests to staff. He also noted in regard to capital improvement projects, the Silverbell median was included as a placeholder in that process. Council will be presented with the Capital Improvement Program, which includes federal and state, Marana and RTA dollars, and will be asked to approve that. Council Member Post asked how hard it would be to go back to the Silverbell Road district and put it in for maintenance. Mr. Davidson responded that the homeowners' association has been in conversation with him and staff about this issue. The homeowners' association is not opposed to partnering with the town to help pay for maintenance. That could be part of January 24, 2012 Council Meeting Minutes 4 the Council's budget adoption — that if the town makes the initial investment to clean up Silverbell, the homeowners' association could pick up the future maintenance. Further discussion ensued regarding the State Land Preserve lease. According to Mr. Cassidy, it's a commercial lease that provides the town can't do anything with the property. It is very restrictive. Mr. Montague responded to another question about construction sales tax, noting that an independent auditor reviews the development services data and the construction tax is subject to random audits. Mr. Davidson concluded the presentation noting that the overview of the budget for the next fiscal year will be rolled out to staff beginning Wednesday, January 25 at the MOC. Vice Mayor Comerford asked if Council could get progress reports throughout the process so they can better understand how staff arrived at their final calculations and decisions. Mr. Davidson responded that each iteration of the budget from the various departments can be given to Council. Executive Session pursuant to A.R.S. §38- 431.03 (A)(3), Council may ask for discussion or consultation for legal advice with the Town Attorney concerning any matter listed on this agenda. ADJOURNMENT. Motion to adjourn at 7:36 p.m. by Council Member Post, second by Council Member McGorray. Passed unanimously. CERTIFICATION I hereby certify that the foregoing are the true and correct minutes of the Marana Town Council meeting held on January 24, 2012. I further certify that a quorum was present. ��� till�!/�►� ?JoJC. Bronson, Town Clerk +����® . $M January 24, 2012 Council Meeting Minutes 5